10 Tips for Operating a Sari-sari Store Successfully

The jeepney is often touted as the greatest symbol of Filipino enterprise and ingenuity, but oh, I beg to differ. For me, that title belongs to the sari-sari store.

 

Ah, the humble sari-sari store. Unless you’ve lived your entire life in a chi-chi residential village where each plot of land costs ten times that of an average person’s lifetime earnings, you may have come across one at least once. You probably even frequent a trusty Aling Nena’s Tindahan or something like that close to where you live.

 

Apart from being the no. 1 purveyor of “chichirya” (junk food) and cigarettes, sari-sari stores are often the first choice of many OFW dependents when it comes to setting up a small business, and with good reason. For one, they require only a small space and very little capital. With just 5-10 square meters and around Php5,000-Php10,000 worth of initial inventory, you can already get started. For another, sari-sari stores allow most store owners to earn money while still looking after their homes and their children, especially if the store itself is just on the ground floor of the house.

 

Still, while this business is fairly easy to get into, making any actual money from it in the long term does require certain strategies, such as the following:

 

1. Location, location, location.

 

Oh, gosh, this rule pretty much applies to any brick and mortar business that I’ve lost count of how many times I’ve written those three words here on the iRemit blog.

 

Having a sari-sari store on your doorstep can be a start, but your goal should be to reach more people. If your house is located in a busy neighborhood with lots of foot traffic, that’s great. If not, you should also consider venues that can bring in more potential customers, such as those near schools, town plazas, or public transportation hubs.

 

2. Set your prices carefully.

  Set your prices carefully 10 Tips for Operating a Sari sari Store Successfully  

A sari-sari store’s goods usually cost a little more than their supermarket counterparts since your customers are also paying for convenience.

 

On the other hand, try not to set too high a price on your stuff, especially if you’re competing with existing stores in the area. As a guide, you can put a mark-up of up to Php20 on items like canned goods and soap and a profit margin of around Php5 for soft drinks.

 

Better still if you can somehow institute a price war by charging the lowest possible amount for your goods while still retaining a decent profit. How do you that? Check out the next item.

 

3. Look for good suppliers and cultivate a healthy relationship with them.

 

Most sari-sari store owners get their inventory from the market or from the grocery (Hello, Puregold). And because most of your customers also go to these places to restock their household consumables, they can easily tell if you’re pricing your items a little too high.

 

If you want to be really competitive, go directly to distribution companies that supply groceries and try to source your merchandise from there. This way, you’ll be able to lower your costs AND price your items lower, further increasing your profitability.

 

4. Keep track of your revenues and expenses.

 

Being on top of your financial transactions is crucial to any successful business. Noting your product costs and sales in ledger notebooks is good, but if you can set up a computer spreadsheet for your sales records, so much the better.

 

5. Pick the right merchandise to stock.

  Pick the right merchandise to stock 10 Tips for Operating a Sari sari Store Successfully  

If you do your bookkeeping correctly, you’ll be able to glean which products are most in-demand in your area. Are the students in the school nearby flocking to your store for soft drinks and packets of Boy Bawang? Do the construction workers from the site across you come by every afternoon for a fresh pack of cigarettes? Look at the figures after a month’s operations and figure out what kind of story they’re telling, then take your lead from there.

 

6. Take note of your customers’ buying habits.

 
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Image Credit: Philippe Cabot

 

It’s especially important to identify the items that your regular customers always look for but currently aren’t on stock. If there are quite a handful of your regulars asking for the same thing, you may want to add this to your product line.

 

The same goes for items you need to take off your display: if a certain product isn’t selling too well or sits on your shelves for far too long, it’s probably best if you nix it from the store altogether.

 

7. Don’t mooch off your inventory.

 

Tempting as it may be, don’t use your sari-sari store’s goods to stock your pantry or fridge at home. Or if you do so, you should reimburse the business for the cost of those items.

 

Consuming your goods without paying for them will not only diminish your display, but it will also shrink your capital. Before you know it, you’ll have eaten or consumed your entire business, so keep your hands (and those of your kids) off the merchandise.

 

While you’re at it, keep the finances of your household and your sari-sari store separate so that you have an accurate record of how much you are spending on your business and how much money it’s making, if at all.

 

8. Preserve the quality of your goods.

 
2971337414 cef09f3d51 z 10 Tips for Operating a Sari sari Store Successfully

Image Credit: Jojo Redota

 

Monitor your shelves at least once a week to see if there are any expired or damaged products you need to discard. Avoid placing items in direct sunlight and remove any rotten fruit or vegetables at once if you decide to sell fresh produce. And if you use thumbtacks or staple wire to display sachets of powdered goods, try not to puncture these beneath the seal. Even a small tear in the packaging can cause air to come in and harden the contents, and if the sachet happens to contain powdered milk, then the ants will come calling.

 

The last thing you want is a customer asking for a refund while returning a defective or damaged product.

 

9. Set aside a portion of your profits to cycle back into the business.

  Set aside a portion of your profits to cycle back into the business 10 Tips for Operating a Sari sari Store Successfully  

This strategy is key if you really want to grow your business beyond its humble beginnings.

 

The rule of thumb is to set aside ten percent of each day’s earnings as profit, so for example, if you sold Php300 worth of items today, squirrel away Php30 of it. It may seem like a small amount, but if you are faithful to this approach, it can easily add up to something substantial, which you can then use to widen your range of product offerings or perhaps even rent out a second location.

 

10. Register your business.

  Register your business 10 Tips for Operating a Sari sari Store Successfully  

Operating your business gives you more credibility and makes your store more trustworthy since those plaques and certificates tell your customers that you are complying with basic hygiene and safety standards.

 

Fortunately, most local government units have a one-stop shop department that allows small business owners like yourself to process the necessary permits more efficiently. Visit your Municipal and City Hall and see what the requirements are so that you can prepare them in advance.

 

In sum, putting up and running a sari-sari store business is simple, but it’s still not easy. However, if you stick it out and do things right, you may find your little corner shop blossoming into something more in the future, such as a full-fledged grocery, and that’s sure to prove even more rewarding.

Serena Estrella

Serena joined iRemit back in 2016, and has tormented its Marketing Head constantly ever since. To get through the rigors of writing about grave concerns like exchange rates, citizenship requirements, and PH-AU news, she likes to blast Mozart, Vivaldi, ONE OK ROCK, and Shigeru Umebayashi in the background. She does a mean Merida voice in her spare time too.

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